Contingent assets and SRR: Difference between pages

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''Financial accounting''.  
Special resolution regime.


Contingent assets are defined as possible assets that arise from past events and whose existence will be confirmed only by the occurrence of one or more uncertain events not wholly within the reporting entity’s control.
Provisions for [[resolution]] of failing financial institutions under appropriate legislation and regulation. In many countries provisions extend beyond banks to certain other types of institution.


 
For example, in the US under [[OLA]] and [[FDIA]] that established [[FDIC]] and in the EU under the [[BRRD]].
The generally accepted accounting treatment for contingent assets is that a contingent asset should ''not'' be recognised, because it could result in the recognition of profit that may never be realised.
 
Where the inflow of economic benefits is ''probable'' the entity should disclose a brief description of the contingent asset and an indication of its financial effect. 
 
If there is only the ''possibility'' of an asset arising no mention at all should be made in the accounts.
 
 
Relevant accounting standards include Section 21 of FRS 102.
 
 
== See also ==
* [[Contingent liabilities]]
* [[FRS 102]]
* [[Realisation]]

Revision as of 11:07, 13 August 2014

Special resolution regime.

Provisions for resolution of failing financial institutions under appropriate legislation and regulation. In many countries provisions extend beyond banks to certain other types of institution.

For example, in the US under OLA and FDIA that established FDIC and in the EU under the BRRD.

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